PUG Public Rec.

RNS Number:0477Y
Public Recruitment Group plc
07 February 2006



07 February 2006


                            Public Recruitment Group

      Variation in earn out consideration, trading update and results date


The Board of Public Recruitment Group PLC provides the following update.


Variation of earn-out consideration

Following recent acquisitions of Kellis Group Limited ("Kellis") and JCJ Limited ("JCJ"), the Group had obligations to 
settle the earn-out elements of the consideration by issuing equity in PRG.  The Board has sought to address the 
dilutive effect of issuing shares at current share price levels and is pleased to announce that agreements have been 
reached whereby the consideration will be paid as a mixture of cash, shares and non guaranteed convertible loan notes 
rather than solely in PRG shares.

Kellis, acquired in September 2005, has earned additional consideration amounting to #3.9m reflecting better than 
anticipated trading. This consideration will be paid in non guaranteed loan notes, interest bearing at base rate plus 1%
pa from 1 February 2006. The first #2m of loan notes are to be repaid by 28 April 2006, otherwise the loan note holders 
have the right to convert the loan notes to ordinary shares of PRG, at a share price of 37.5p. Alternatively, should the
conversion right be waived, the interest increases to base plus 4% pa.

The remaining #1.9m of non guaranteed loan notes are payable by 31 July 2008. They are interest bearing at base plus 1% 
pa until 30 June 2006, and base plus 4% thereafter. The loan note holders have the right to convert the loan notes to 
shares at a price of 37.5p if either #2m is not paid by 28 April 2006 or #1.9m is not paid by 31 July 2008.

JCJ, acquired in December 2003, has earned additional consideration amounting to #1.75m. This will be partly satisfied 
by an immediate payment in cash of #0.5m, the issue of 630,663 shares at 42.35p, with the balance of #0.9m satisfied in 
non guaranteed convertible loan notes, repayable by 31 December 2006. The loan notes are interest bearing at a rate of 
4.5% pa from February 2006 to July 2006, thereafter at 10% pa. The loan note holders have the right to convert these 
loan notes into PRG shares at the lower of the average share price in December 2005 (42.35p) or in July 2006, as 
applicable. If the loan note holder exercises the conversion right, PRG has the option to either issue shares or to 
settle the loan notes in cash within seven days.

The Group is in advanced negotiations with a number of UK clearing banks regarding an increase in the overall funding 
facility. The successful completion of these negotiations will enable the company to settle the loan notes and avoid the
earnings dilution.


Trading update


The Board confirms that trading for the year to 31 December 2005 was in line with market expectations.

The trading in 2006 has started well with continued growth in organic revenues across all sectors. Whilst the new 
National Framework Agreement is still in its infancy, the Group continues to grow market share with the addition of Tier
1 (sole supply) and Tier 2 (dual supply) contracts.

The Board remains confident that the Group is well positioned within each of its chosen sectors to deliver financial 
returns for shareholders over the medium term. A more detailed trading update will be delivered at the time of the 
results announcement.

The preliminary results for the year ended 31 December 2005 will be released on Thursday 2 March 2006.


Enquiries:        Darren McLaney
                  Chief Executive, Public Recruitment Group PLC
                  (0114 283 4925)

                  Nick Williams
                  Group Finance Director, Public Recruitment Group PLC
                  (0114 283 4925)

                  Ginny Pulbrook / Fiona Bradshaw / Justin Griffiths
                  Citigate Dewe Rogerson,
                  0207 638 9571


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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